Kenya is a signatory to the Paris Agreement on Climate Change (2015), whose key objective is to limit global warming to below 2 or preferably 1.5 degrees Celsius. This calls for transitioning to clean energy by countries, and Kenya is on the path to 100 per cent transitioning by 2030. Renewable energy accounts for more than 73 per cent of power generation, while 90 per cent of all electricity in use is from clean sources, mainly from Lake Turkana Wind Project, hydro-electric power, solar and geothermal.
Policy Issue
Approximately 70 per cent of Kenyan households still use biomass for primary cooking, which exposes them to various health risks through indoor air pollution and reduces forest and tree cover and increases greenhouse gas emissions. This is against the aim of the country to enhance the transition to clean cooking by 100 per cent by 2030. The introduction of the Mwananchi Gas project in 2017 aimed at increasing the uptake of liquefied petroleum gas (LPG), which is cleaner than biomass sources. However, LPG prices have recently continued to increase, thus causing poor households to resort to dirty sources of cooking such as firewood, charcoal, and kerosene.
Country Policy and Effort on Liquified Petroleum Gas
Kenya has identified key priority mitigation measures to meet the country’s commitment through the promotion and implementation of clean, efficient, and sustainable energy technologies to reduce over-reliance on fossils and non-sustainable biomass fuel. Towards this, it has made steady progress to clean cooking using Liquified Petroleum Gas (LPG), with current penetration of about 19 per cent (2.4 million) and 100 per cent transition to clean cooking by 2028.
Liquified Petroleum Gas (LPG) burns very clean compared to other fossil-derived fuels such as charcoal and kerosene. In addition, it burns completely and there is low carbon emission from this fuel, hence reducing climate change effects. Kenya has made major strides in the transition from dirty fuels to clean fuels for which the current number of urban homes using LPG is at 53 per cent and rural households at 5.6 per cent.
In 2016, the government zero-rated VAT on LPG with the goal of enhancing its uptake as a source of energy. Consequently, the country saw tremendous growth in the uptake of LPG by more than 50 per cent from 151,000 tons to 326,000 tons between 2016 and 2020.
Policy Gaps in Prices of Liquified Petroleum Gas
Despite government efforts to increase the uptake of LPG through tax incentives, there has been a rapid increase in LPG prices. With zero-rating of LPG, the prices remained stable for the period 2016-2021 before significantly increasing due to the reintroduction of VAT in July 2021 as shown in Figure 1. LPG prices increased to Ksh 3,400 in March 2022 compared to Ksh 2,277 in March 2021, representing a 64 per cent increase.
Figure 1: Trend of LPG prices in Ksh from 2016-2022
Data source: KNBS (2021 and 2022) Economic Survey
The increase in LPG prices is attributed to a surge in demand for propane and butane on the reopening of economies from the COVID-19 lockdowns. The high demand for propane and butane, the by-products of crude oil used to manufacture LPG in the Gulf countries, led to the increase in LPG prices across the world. Kenya is not an exception given that it obtains most of its LPG from the Middle East nations, mainly Saudi Arabia, Singapore, and the United Arab Emirates. If this trend continues unabated, it will pose a significant challenge in the campaign against climate change given that dirty cooking fuels contribute about 2 per cent of carbon emissions globally. It implies that households will resort back to the relatively cheaper wood fuel, kerosene, and charcoal, which are high carbon emitters posing a major challenge in the fight against climate change.
About 70 per cent of Kenyans depend on biomass fuel for primary energy, most of which is non-renewable. This leads to indoor air pollution, deforestation, and greenhouse gas emissions. Indoor air pollution causes over three million deaths globally per year. The World Health Organization estimates this to affect more women and children given that they are more exposed to the cooking area. Having a larger population using dirty cooking means that the rate of deaths related to household air pollution is high and thus the need to transition to clean cooking. However, the transition has not been smooth given the recent rise in LPG prices that hinder people from fully transitioning to cleaner sources of cooking. Consequentially, the transition to clean cooking, which can be accelerated by affordable LPG prices, presents an opportunity for technological leapfrogging with energy and greenhouse gas emissions savings, and health benefits, particularly for women and children.
By embracing the use of LPG, there will be less cutting of trees for purposes of cooking and heating, this means that forest cover will be preserved. In addition, Kenya will be able to make progress towards achieving a tree cover of at least 10 per cent of the land area by 2030 as stipulated in the National Climate Change Action Plan (2018-2022). Forests play a prominent role in climate change action by absorbing carbon dioxide from the air. They do this by acting as a powerful carbon storage system. It is estimated that forests could help in the absorption of one-third of the total global carbon dioxide reductions needed to cut global warming to less than 2oC by 2030. However, when trees are cleared for wood fuel and charcoal use, the stored carbon gets released into the air, thus contributing to global warming, and slowing down the war against climate change.
Climate change being a global problem requires concerted efforts worldwide; therefore, countries across the world are required to develop policies, frameworks, and actions towards mitigation and adaptation. Towards this, Kenya has developed various policies, frameworks, and action plans such as the Kenya National Adaptation Plan 2015-2030; Climate change Act, 2016; National Climate Action Plan (2018-2022); and National Climate Change Response Strategy, 2010. Further, in 2016, the government through the Ministry of Petroleum and Mining launched a policy dubbed Mwananchi Gas Project. The project aimed at helping poor households to have access to cleaner cooking methods to assist in curbing rampant respiratory diseases caused by dirty modes of cooking. These efforts are crucial towards the fight against climate change and Nationally Determined Contribution (NDC) target. However, the escalating prices of LPG might slow down the realization of these targets.
Conclusion and Way Forward
Kenya could continue implementing its policy and legal framework to enhance the uptake of clean cooking. This includes reviving the Mwananchi Gas Project that was put on hold in 2018 due to violation of standards and quality of the products supplied by the contracted firms. Further, the current draft Petroleum Importation Quota Allocations Regulations, 2022 need to be fast-tracked. The draft provides regulations for stabilizing LPG prices in an un-regulated pricing regime and ensuring the security of supply in times of uncertainties. As a result, EPRA through the National Oil Corporation could regulate the market prices by enhancing the stake of the government in the importation of LPG. This regulation would moderate the unscrupulous price increases on LPG by the private dealers based on their market share, which hinders the transition to clean cooking.
As a matter of urgency, the government could reconsider zero-rating of VAT on LPG to increase the uptake and retention among Kenyans. LPG is an essential short-medium-term way to cutting down on GHG emissions on the pathway to even cleaner renewable energy.
Authors: Naikumi Martha Nanekoi, Young Professional, Infrastructure and Economic Services Department
Hassan Ali Ibrahim, Young Professional, Social Sector Department
